On this page
- 01Key takeaways
- 02Do website costs include VAT?
- 03Can you reclaim VAT on a website?
- 04What about overseas suppliers?
- 05How should you compare quotes with and without VAT?
- 06When does VAT not matter much?
- 07What does this look like in practice?
- 08VAT checklist
- 09Next step
- 10Sources and further reading
- 11Frequently asked questions
Key takeaways
Website design and hosting from a VAT-registered UK supplier carry VAT at the standard 20%, so a £5,000 quote may mean £6,000 to pay. VAT-registered businesses can usually reclaim it; others cannot, so it is a real cost. Many freelancers below the registration threshold do not charge VAT. Always ask whether quotes include VAT.
- Standard VAT rate: 20%.
- £5,000 plus VAT: £6,000 to pay.
- VAT-registered buyers: usually reclaim it.
- Not registered: VAT is a real cost.
Want your website budget checked for VAT? Message us on WhatsApp.
Chat on WhatsApp →Do website costs include VAT?
Website costs from VAT-registered UK suppliers carry VAT at the standard rate of 20%. Quotes to businesses are often shown excluding VAT, so check before comparing. Suppliers below the VAT registration threshold do not charge it, which can make their quotes look cheaper.
Can you reclaim VAT on a website?
If your business is VAT-registered, you can usually reclaim VAT on website design, hosting and software used for your taxable business. If you are not registered, VAT is part of your cost and should be in the budget. Check with your accountant for your circumstances.
- Registered: reclaim on your VAT return.
- Not registered: budget the full amount.
Want quotes compared on a like-for-like VAT basis? Message us on WhatsApp and we will discuss your requirements.
Chat on WhatsApp →What about overseas suppliers?
Services from overseas suppliers to UK businesses usually fall under the reverse charge, where you account for VAT yourself rather than the supplier charging it. HMRC's place of supply guidance explains how this works. For non-registered businesses, overseas services can avoid UK VAT on the invoice.
How should you compare quotes with and without VAT?
Compare quotes on the amount you will actually bear. If you are VAT-registered, compare net prices. If you are not, compare gross prices, so a VAT-registered agency at £4,000 plus VAT costs you £4,800 against a freelancer's £4,500 with no VAT.
When does VAT not matter much?
VAT matters little for registered businesses, where it is reclaimed and only affects cash flow until the return. It matters most for small businesses below the threshold, charities and others that cannot reclaim it.
What does this look like in practice?
At Global Bridge Labs (GBL), a UK holistic therapist compared a £3,000 quote with a £3,400 one. The first was plus VAT; the second was from an unregistered freelancer. As the therapist was not VAT-registered, the first quote actually cost £3,600, making the second £200 cheaper.
VAT checklist
- Ask if each quote includes VAT.
- Check your own VAT registration status.
- Compare net or gross as appropriate.
- Budget VAT on monthly fees too.
- Check reverse charge for overseas suppliers.
- Confirm reclaim rules with your accountant.
Next step
Write "inc VAT" or "plus VAT" next to every website quote and monthly fee. Then convert all to the amount your business will actually pay.
Message us on WhatsApp for a website budget template with VAT, or book a 30-minute consultation.
Chat on WhatsApp →Sources and further reading
- VAT rates · GOV.UK
- VAT registration thresholds · GOV.UK
- Place of supply of services (VAT Notice 741A) · HM Revenue & Customs
Frequently asked questions
Do web designers charge VAT?
Web designers who are VAT-registered charge VAT at the standard 20% rate on design, build and care. Freelancers below the VAT registration threshold do not charge VAT. Business quotes are often shown excluding VAT, so always check whether the price includes it before comparing suppliers.
Can I claim back VAT on my website costs?
If your business is VAT-registered, you can usually reclaim VAT on website design, hosting and software used for taxable business activities. If you are not registered, you cannot reclaim it, so VAT is part of the cost. Ask your accountant about your own situation.
Is there VAT on overseas website services?
Services bought from overseas suppliers by UK businesses usually fall under the reverse charge, meaning the supplier does not add UK VAT and VAT-registered buyers account for it on their return. Rules vary by service type, so check HMRC guidance or ask your accountant.
Written by
Global Bridge Labs (GBL) is a UK–Sri Lanka partner for social media, websites and BPO. Everything here comes from client delivery, not theory.
